TaxTMI 
TaxTMI 
2026 (8) TMI 1499
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....ssable value of USD 54,000. The out-of-charge was given to the petitioner on 02.01.2025, after proper assessment and examination. 3. The petitioner paid stamp duty of Rs. 14,621 on the vehicle on 30.12.2024 and also paid the applicable customs duty amounting to Rs. 99,78,795/- on 31.12.2024. The petitioner also got the car insured. However, the registration number was awaited. 4. On 07.02.2025, the Directorate of Revenue Intelligence (DRI) conducted a search at the residential premises of the petitioner, detained the imported car under a Panchnama prepared on the said date, and further directed the petitioner not to deal with the said car. Summons were issued by the DRI on 14.02.2025 and 03.03.2025, asking the petitioner to appear in connection with the inquiry conducted into the import of the car. On 10.03.2025, the petitioner authorised his son to appear in connection with the summons dated 03.03.2025. Another summons dated 21.03.2025 was also issued to the petitioner. However, the petitioner could not appear on the said date. On 04.04.2025, the petitioner supplied the documents which were in his possession and also tendered an explanation. Thereafter, the petitioner filed ....
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....made before the Supreme Court on behalf of the DRI to the effect that the pendency of the writ petition before the High Court came in the way of the department initiating appropriate proceedings under Section 110 of the Act, whereas there was no stay on the investigation. She has further stated that the learned ASG had admitted that there was no seizure on record. Thus, it is urged that the respondents may be directed to release the car of the petitioner. In this context, reliance is placed on the decision of the Delhi High Court in case of Worldline Tradex Pvt. Ltd. Vs. Commissioner of Customs (Import), 2016(340) ELT 174(Del). SUBMISSIONS ON BEHALF OF THE RESPONDENT - AUTHORITIES : 9. Opposing the aforesaid submissions and the present writ petition, learned Senior Standing Counsel Mr. Utkarsh Sharma, on instructions, has pointed out that this Court may order the release of the vehicle on any of the conditions as may be determined by this Court. 10. Learned Senior Standing Counsel Mr. Sharma has further submitted that the respondents did not issue the seizure memo earlier in view of the interim order dated 18.09.2025 passed by this Court. 11. It is submitted that now th....
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....t petition before the High Court came in the way of the department in initiating appropriate proceedings under Section 110 of the Act. A further statement was recorded that there was no seizure on record. The Supreme Court directed the department to act promptly, as the car was a perishable commodity, and the issue of the legality and validity of the detention of the vehicle was kept open. (H) After the aforesaid order was passed, a seizure memo under Section 110(1) of the Act was issued on 17.04.2026 and thereafter, a show-cause notice dated 08.05.2026 was issued under Section 124 read with Section 28(4) of the Act. Finally, an order dated 18.05.2026 was issued by the respondent authorities for the provisional release of the seized vehicle by resorting to paragraph No.2 of Circular No.35/2017 dated 16.08.2017, which prescribes the duty/differential duty leviable on the seized goods, the amount of fine and the amount of penalties to be levied under the Customs Act. 14. At this stage, we may mention that paragraph No.2 of Circular No.35/2017 dated 16.08.2027 has been set aside by the Delhi High Court in the case of Shanus Impex (supra) to the extent that it curtails the ....
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....Standing Counsel appearing for the DRI that the petitioner was not cooperating in the inquiry, which was opposed by the learned advocate appearing for the petitioner, who submitted that, in fact, the petitioner, along with his son, had appeared twice before the respondent authorities and had handed over the requisite documents. The Court directed that the report of the investigation be produced by the next date of hearing, and the matter was listed on 27.11.2025. When the matter was listed on 18.12.2025, a statement of the learned Senior Standing Counsel appearing for the DRI was recorded that the report dated 26.11.2025 had already been prepared and had been handed over to the learned advocate appearing for the petitioner. 18. Thus, all the aforesaid orders reflect that this Court never restricted the respondents from carrying out the investigation and proceedings under the Act, including the proceedings under Section 110 of the Act. Thus, a bald statement has been made before the Supreme Court that the pendency of the writ petition before this Court prevented the DRI from initiating appropriate proceedings under Section 110 of the Act, and that there was no seizure memo which ....
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....ed to the respondent within six months of the seizure nor the period of six months ever came to be extended for a further period of six months. In the absence of there being any notice as required by the first proviso even within the extended period upto one year, the consequence that ought to follow is release of the seized car." 20. Thus, as per the decision of the Supreme Court, if the goods are seized under sub-section (1) of Section 110 of the Act, the notice is required to be issued within a period of six months under Section 124(a) of the Act, which can be extended to a further period of six months by resorting to first proviso under Section 110(2) of the Act, and if, in the absence of there being any notice as required by the first proviso even within the extended period of up to one year, the consequence that ought to follow is the release of the seized car. 21. The relevant part of Section 110 is as under: "SECTION 110 : Seizure of goods, documents and things (1) If the proper officer has reason to believe that any goods are liable to confiscation under this Act, he may seize such goods: [PROVIDED that where it is not practicable to remove....
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....h officer. The second proviso further stipulates that where it is not practicable to seize any such goods, the proper officer may serve an order on such person, directing that such person shall not remove, part with, or otherwise deal with such goods except with the previous permission of such officer. In the instant case, it is not the case of the respondent-department that the car which was ordered to be detained would fall within the categories of the goods as mentioned in the first proviso. Thus, the proper officer was required to pass an order under second proviso, which is not done. In this context, we rely upon the judgement of Delhi High Court in the case of Worldline Tradex Pvt. Ltd. (supra). "17. Mr Agarwala drew the attention of the Court to the proviso to Section 110(1) of the Act which envisages a situation where it is not practical to seize imported goods. The proviso states that in such instance "the proper officer may serve on the owner of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer". 18. In the present case, as already noted, no order was served on the....
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.... to believe that seizure of the goods was warranted under Section 110(1) of the Act. The following discussion in Mapsa Tapes Pvt. Ltd. v. Union of India (supra) supports the case of the Petitioner that, for there to be a valid seizure of the goods it is incumbent on the proper officer to record reasons to believe, under Section 110(1) of the Act, that the goods are liable to be confiscated: "23. The case in hand, in our opinion, will fall within the four corners of Section 105 of the Act as in the present case the seizure of the goods was preceded by search. It is even evident from panchnama dated 8-2-2005 (Annexure P. 3) attached with the writ petition. 24. In the present case, what to talk of respondents themselves producing the records to show recording of reasons, even in spite of specific query by the court, nothing has been produced before us to show as to whether reasons were recorded or not before the search was authorised or the seizure took place. All what has been relied upon is the report of Directorate of Revenue Intelligence, Delhi Zonal Unit (DRI) which is much prior to the date of seizure and important aspect of the matter is that the goods were cl....
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....the goods only in case wherein it has reason to believe that the goods is liable to be confiscated. The powers to seize and the power to confiscate are quite drastic powers. Little elaboration would show apparent inconsistency in the conduct of the respondent, from which it can be said that formation of belief for seizure by the respondent is vitiated. " 23. The power of seizure under Section 110 of the Act has to obviously be exercised for valid reasons. The proper officer has to record his reasons to believe that the goods that he proposes to seize are liable to confiscation. The said reasons for exercise of the power have to be recorded prior to the seizure. In the present case, as already noticed, apart from the panchnama, there is no separate order passed under Section 110(1) of the Act by the proper officer recording the reasons to believe that the goods are liable for confiscation. Since till date no other order exists and no such order has been communicated to the Petitioner, it is not possible to accept the plea of Mr Agarwala, learned counsel for the DRI, that the 'detention' of the goods by the DRI was with the authority of law and in any event should be....
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.... any such goods, the proper officer may serve on the owner of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer. 4. In view of the above, in all future cases, the following may be adhered to: • Whenever goods are being seized, in addition to panchnama, the proper officer must also pass an appropriate order (seizure memo/order/etc.) clearly mentioning the reasons to believe that the goods are liable for confiscation. • Where it is not practicable to seize any such goods, the proper officer may serve on the owner of the goods an order that he shall nor remove, part with, or otherwise deal with the goods except with the previous permission of such officer. In such cases, investigations should be fast-tracked to expeditiously decide whether to place the goods under seizure or to release the same to their owner. 5. Further, it has been brought to the notice of the Board that in cases where provisional release of seized goods is allowed under Section 110A of the Act ibid, show cause notices are not being issued within the stipulated time period on the gro....
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.... him to remain present. Section 110(1) of the Act uses the expression "reason to believe" that any goods are liable to confiscation, the proper officer may seize the goods. The first proviso uses the expression "where it is not practicable to remove, transport..., he may give custody of the goods on execution of an undertaking". The second proviso further mentions "where it is not practicable to seize the goods". In either scenario, the proper officer is legally bound to satisfy a two-fold statutory obligation before passing a seizure order, a) he/she must explicitly record reasons that the goods are liable for confiscation, and b) he must record clear satisfaction by passing the order regarding the nature of the goods under the respective provisos, which strictly restricts, the removal, transport, storage, or physical possession and the physical seizure. The panchanama cannot satisfy the ingredients of the Section 110 of the Act, and an order is mandatory under the proviso to Section 110 of the Act for paving the way for issuance of notice under Section 124(a) within a period of 6 months unless extended. 29. As a necessary corollary, the proper officer or the DRI officers canno....